Question

What is obtained on dividing national income by total population?

• A. Marginal Income
• B. Total Income
• C. Total Savings
• D. Per Capita Income

Hint:

Per capita income is often used to compare the standard of living between countries and track economic growth over time.

Answer 1

The Correct Option is D

When national income is divided by the total population, it gives the per capita income, which is used to measure the average income of a person in a given country.
Step 1: Per Capita Income Overview.
Per capita income is a common indicator of the economic health of a country and is calculated by dividing the national income by the total population.
Step 2: Analysis of options.
- (A) Marginal Income: This is the additional income generated by an increase in production or investment.
- (B) Total Income: This refers to the total earnings in an economy but does not account for the population size.
- (C) Total Savings: This is the sum of savings within an economy, not related to dividing national income by population.
- (D) Per Capita Income: The correct answer. This is calculated by dividing national income by the population.
Step 3: Conclusion.
The correct answer is (D) Per Capita Income, which is the result of dividing national income by the total population.